How To Manage Risk For Your Business
Friday, November 03, 2006
Every business makes decisions and the reprocussions of those
decisions have risks. Failing to manage the risks your business
takes within acceptable levels can lead to the entire failure of
your business. If your business really isn't doing very well and
looks like it is going under (9 out of 10 businesses fail within
their first two years) then you want to have it fail as
gracefully as possible.
1. Have A Disaster Plan
If your business is going to sink, make sure you don't sink
with the ship! If at all possible when creating your business
make sure that it is incorporated and that you have a status of
limited liability rather than unlimited liability. Limited
liability means that if your business crashes it is treated as
a separate legal entity - your personal belongings, your house,
etc, won't be subject to being reclaimed and sold to give
investors the money they lost.
2. Have A Plan B
If your business looks like it is faltering, you should always
have a plan B. You could borrow more money, raise prices, lay
off staff, or find cheaper suppliers. In reality, however, most
businesses choose to diversify where they concentrate their
efforts. Instead of marketing your computer basics course to
elderly people, for example, you could expand to creating
courses for children. Or you could change how you distribute
your product or service - instead of teaching kindergarteners
in a classroom you could produce an educational CD-ROM and sell
it online.
3. Going Out Of Business Sales
People are drawn to stores that are having going out of
business sales in hopes of finding ludicrously underpriced
items. If you plan it well, your last day in business might not
be so bad. Just make sure everyone knows that youre closing down
for real, but still price everything ever-so-slightly above
cost. Your focus should not be on making sure your store is
completely empty but that you lose as little money as possible.
4. Selling Your Business
Although you will want to provide whoever you plan on selling
your business to with accurate numbers, there's nothing
dishonest about selling a failing business. Your competition
just might jump on the opportunity to snap up your business
just to, at the same time, absorb your existing customer base.
About The Author: For more great risk management related
articles and resources check out
http://qualitybusinessopportunities.info
posted by Dennis Cheesman @ 6:48 AM,
